You have to have it, but do you really need to spend a fortune each month? Sometimes it seems as though you’re spending more on car insurance each month than you’re spending on groceries. So what can you do to lower your insurance rates?


  1.  Change car insurance.

If you’re paying too much for car insurance, chances are you just haven’t found the right insurance company to meet your needs. You may have been one of the many individuals who signed up for the first car insurance company that popped up in their Google search; or maybe you’ve been with the same insurance company since you first started driving and just stayed with the agency because that’s who Mom and Dad still use. If this sounds like your situation, it’s definitely time to shop around.


Amazingly, only a third of car insurance policyholders ever take advantage of the savings available through shopping around. But of those one third, savings average $356 per year. You’ll soon discover that the cheapest car insurance can still give you excellent coverage and extra money in the bank.


  1. Negotiate lower rates.

Car insurance companies count on you to become complacent, stay with them for the life of your car and your next car and your next, without questioning the premiums you’re paying. If you’re serious about saving money, you need to stay on top rate changes. A few dollars here and there add up to a lot of money over time. It’s good to re-evaluate your car insurance every six months to a year by comparing old itemized rates with new rate increases. If you stay informed about the changes going on, it’s sometimes possible to negotiate a lower rate much like you do with cable companies when their rates go up.


Here are some bargaining points to think about when approaching your insurance company:


Change of location. If you’ve moved within the previous six months, you may be eligible for cheaper rates. Rates are often determined by risk associated with a particular region. High traffic areas, high crime areas, and areas prone to volatile weather all translate to higher rates; however, if you move to a less risky area, your rates most likely will go down.


It’s been over three years since you got a ticket. When you get a traffic violation, be prepared to have higher insurance rates for the next three years. If your three years just ended, inform your insurance company that your record should now be “clean.” Having a clean record could save you a few hundred dollars, up to a thousand dollars or more a year, depending on the type of offense.


Your car is getting older. Part of your premium is based on the age of your car. Cars depreciate around 2.5% each year–double that if you own a luxury car. If your insurance company doesn’t take that into consideration, you need to bring it up. Find out what depreciation rates they use, and if they aren’t already giving you what you deserve, you may be entitled to a decrease in your premium.


You drive your car infrequently. If you have decreased the number of miles you drive your vehicle, you should be able to bargain for a lower rate. The general guideline is if you drive less than 10,000 miles per year, you should qualify for lower the premium. If you drive less than a handful of miles per day, you may qualify for significant reductions. Make sure you let your insurance company know, they won’t know unless you tell them.


You got married. Married couples are often eligible for significant discounts. Unfortunately, your insurance company will never know unless you tell them. If you have recently, or not so recently, been married and you discover you are missing out on the discounted premium, let your company know you’re no longer single and begin saving money.


These are solid bargaining points. If your insurance company still isn’t willing to budge, shop around; even if they are willing to budge, shop around and see if you can get an even better rate than your company’s renegotiated rate.


  1. Ask about special rates and discounts.

Many car insurance companies offer special discounts for bundling your car insurance and homeowners insurance, completing defensive driving courses, choosing higher deductibles, installing anti theft devices, etc. These premium discounts may not be offered, it may be up to you to let your agent know you feel you qualify. Two of the best special rates are for good students and safe drivers:


Good student discounts. If you have teen drivers or college students who get good grades, you should definitely ask for this discount. To be eligible for this discount, most insurance companies stipulate that the insured individual must be younger than 25, be enrolled in high school or college full time, and maintain at least a B average or be on the school’s honor roll or the college’s dean’s list. You can save up to 25% with this discount. That’s an especially huge discount considering how expensive insurance is for those under 26. If your company doesn’t offer this benefit, shop around.


Safe driver discounts. Most car insurance companies offer some sort of safe driver discount or refund for drivers who are free from accidents (at-fault accidents) or traffic violations continuously over a selected period of time. Many accident-free drivers receive discounts of over 30% off of their premium. You should be rewarded for your safe driving. If your company doesn’t reward you, it’s time to look for a new company.


There is no need to be paying high car insurance rates. If your insurance company isn’t taking good care of you, you need to be proactive. It’s ok to change car insurance companies, negotiate lower rates, and ask about special rates and discounts. You’re your own best advocate. And if you aren’t getting the best coverage at the cheapest rate, you’re paying too much for your car insurance.